Thursday, January 16, 2014

A successful consolidation of the Selangor water industry could lead Engtex, already the country’s largest pipe maker by market capitalisation, even higher.

As the newly-structured water industry should involve the long-overdue replacement of the country’s aging water pipelines, Engtex by virtue of its track record and expertise is bound to get a slice of this.

Of the 130,000km of pipes in Malaysia, a third were made of asbestos cement, which has been known to cause cancer. Assuming that just half of the asbestos cement pipes are replaced with mild steel and ductile iron pipes, the industry is looking at a potential RM5bil market. Meanwhile, the Langat 2 project, which is crucial to the state’s impending water crisis, will also require some 50,000 tonnes of pipes worth RM200mil. Engtex is touted as a frontrunner to clinch pipe supply jobs for Langat 2.

There is also Petronas’ Rapid project which will require some RM200mil worth of pipes.

On the east coast, Engtex is targeting some RM100mil in pipe orders for Kuantan Port City, a RM4bil industrial and logistics hub to be developed by 2020.

On top of these, some RM800mil in new pipes for housing projects and mega projects such as Johor’s Iskandar Malaysia is needed annually.